Succession_Planning by keralaguest


James W. Walker, Editor

This column addresses emerging trends and issues in the development and
implementation of human resource strategies. Please respond with your views and
experiences to

Do We Need Succession Planning Any More?
     Over the years, I have sat through many meetings in which business unit
executives presented their management succession plans to their peers and the CEO,
discussing profiles of individual candidates identified as “ready now” or “ready in 2 –
5 years”. They were armed with binders or slides, providing charts on management
talent and backup information on the strengths, weaknesses, and capabilities of
individuals. Executives were expected to manage their talent pool and groom
successors within their business units. Individuals were expected to have target jobs
along career paths and plans for training and development. Discussions in the review
meetings were typically polite, led by the CEO, and few changes were ever made in
plans as a result of discussions. Later, when promotions were made, candidates from
the plans were considered, and often selected, furthering a practice of promoting from
within the company.

         Today, however, we are in a faster-pace environment. Executives often
perceive that management succession planning is a tedious paperwork exercise that
fails to produce candidates with the capabilities to lead required business change. A
traditional planning and review process, however well documented, does not
necessarily lead to needed results. More often than not, key assignments go to
individuals other than those named as successors. The desire for new competencies
and rapid business transformation often leads executives instead to unusual choices
internally or external recruiting. Succession decisions made as vacancies occur are
therefore addressed as make or buy choices (develop internally or recruit externally).

        Hence many executives ask, “Why should we try to groom talent when it is
ever more difficult and when requirements are rapidly changing and uncertain? Why
bother to spend precious time on succession planning?”

A New Emphasis on Individual Development

       They have a good point. In keeping with the individual responsibility
emphasis of the “new employment deal”, organizations are emphasizing self-
development rather than management-driven succession and career development.
Development plans are increasingly self-initiated, and individuals seek inputs and
agreement from their managers. Multi-rater (360 degree) feedback has become
commonplace; often using standardized instruments and developmental feedback
processes. Executive coaches are used to provide confidential one-on-one guidance
in addressing specific individual development needs. Individuals increasingly make
their own training and education choices, from a wide array of available seminars,
workshops, and self-study options.

        With job posting and ad hoc consideration of both internal and external
candidates for positions, there is a feel of a “competitive labor market” within many
organizations. Grooming? Hardly! Current emphasis is on developing a pool of
talent relative to preferred competencies – usually representing a set of related or
jobs. By nurturing development of a wide and deep talent pool, capable candidates
will be available.

        Planned job rotation is less common even though broader experience is more
important. A large company was regarded as a model for its rigorous development of
general manager candidates through assignments in two countries, two businesses,
and two functions. I have been informed that they have not been doing this for some
because of the decentralization of the company (hello, silos!), lean staffing, and high
cost of relocations.

         While external recruiting is increasingly relied upon, it entails increasing risk.
Companies aggressively compete for quality candidates in tight labor markets. It is
difficult to assess the actual capabilities of candidates and to match these with
requirements. Further, external hires often find entry and adaptation difficult,
including fitting into the executive team. Recruited executives often bring other
managers with them, and other management approaches and cultures, which slow
assimilation. When recruiting among companies intensifies, there is also increased
risk of losing valued talent, especially high-talent mid-level managers (3- 10 years
experience). Retention of key managers is crucial, especially after years of
investment in their development. Rarely do companies weigh the cost of losing and
then replacing executives. An attitude prevails that “no management job ever goes

Re-inventing Succession Planning

        Some companies believe they can build a competitive advantage through the
superior development of their leadership talent. Successful execution of strategies
requires that each business have individuals with the competencies critical for
effective future business performance in each and every leadership role. Global
competition, aggressive business strategies, and rapid change are increasing the
demand for capable executives. Accordingly, CEOs expect their business unit
executives to consider carefully their management talent requirements, relative to
changing business needs, and address them through appropriate actions.

       Maybe the label “succession planning” is a barrier to shaping new
expectations. How about Leadership Development Planning, or Executive Resource
Planning? One of my favorites is Leadership Depth Assurance. Let’s call it what it
is, or what our top management prefers. For many, Management Succession
Planning is the term they still know and like.

        It is the substance of the process that matters. While there is a wide range of
practices, large companies today typically require some form of documented planning
process for managing the development of leadership talent – within business units and
across the business units. The process should not focus on traditional, position-by-
position slates of succession candidates; rather, it should ensure that changing
business requirements for talent are in some way being addressed effectively.
Executives often still share information on key candidates – to discuss their strengths
and weaknesses and consider their future assignments. At any given management
level, no more than fifty candidates should be reviewed as a talent pool.

         There may no longer be annual succession review “retreats”, but business unit
executives are accountable for the identification and assessment of talent relative to
future needs, rigorous development of this talent, and achievement of measurable
results – most notably the staffing of management roles with capable talent. Ideally,
implementation of the process and results achieved are tracked as part of business
performance, integrated with other executive performance accountabilities. Specific
leadership development subjects are included in regular senior management meetings
throughout the year. However, an intensive discussion once or twice a year can’t
hurt, if it is focused on relevant topics (see Exhibit One).

        Many business unit executives are content to be accountable for developing
(and keeping) their own talent. However, value is added by a company-wide process.
Most notably, there are the opportunities provided for development across business
units, functions, and regions (surfacing talent rather than protecting it within business
units). There is the potential for aligning roles and capabilities with broader company
strategic objectives, values, and principles. There are opportunities to accelerate
development through programs and projects across business units. There is also the
value of weighing and comparing the quality of talent across units, encouraging the
highest standards to be applied. Of course, there is the prospect of grooming
individuals for succession (yes, succession) to senior management roles, avoiding the
temptation to recruit externally.

New Spin on Practices

         Among leading companies, succession planning guides actions to enhance
the quality of the leadership talent pool relative to business requirements. Through
the planning process executives are addressing such changes in leadership
development as:

          Accelerating learning through rapid, substantive assignments in multiple
           functions and businesses (using job vacancies for development purposes,
             creating opportunities through reassignments, opening up blocked
             development positions).

            Tailoring assignments to match individual needs and specific business
             needs (e.g., adapting job content/responsibilities and filling positions for
             developmental purposes)

            Building global perspective early in careers through training, projects, and
             work experience

            Identifying individual aptitude for working in management teams and
             developing team work capabilities

            Ensuring more rapid, more effective implementation of job-related
             learning and development by including development objectives in
             performance accountabilities

            Customizing management education and training to relevant, current
             business issues and priorities and to the specific development needs of
             participating managers

            Comparing internal candidates with best available external candidates

            Recruiting talent one level below key positions, to build the talent needed
             in the two-to-five year time frame (not immediate, not long-term)

            Providing wider pay ranges and more flexible total compensation so as to
             attract and retain top talent.

         As we move into the 21st century, we will certainly develop and apply new
approaches for developing leaders. Do we need traditional succession planning?
Maybe not, but we need something like it to enable our executives to take the steps
required to ensure that each business unit has the needed talent and is effectively
developing future leadership talent. A planning and review process provides a basis
for defining company expectations and holding executives accountable for meeting

           What is your experience? What are your views?
                                   Exhibit One
                    Topics for Succession Planning Discussions

Future Requirements

 What are the few distinctive leadership capabilities that will enable to implement
  our business strategy effectively? (And more effectively than our competitors?)
  Which competencies are different from today?

 How many and what kinds of managers will be required to implement our
  business strategy (resulting from expansion, new products or markets,
  globalization, new organizational structures and roles, or new ways of doing

 What will be the management staffing needs driven by attrition and internal

 What are our objectives regarding diversity in management (women, people of
  color, and international talent)?

Development of Talent

 Do we have the talent across the organization that will match these requirements
  (pools of talent, including long-term high potentials -- not individual position

 Are development plans are in place to build needed capabilities and to provide the
  job experiences, education, and other learning experiences individuals need?

 Have development plans been executed? Have candidates completed the planned
  education, project or job assignments, etc.?

 Are we effectively utilizing company-sponsored executive programs, external
  university programs, and other resources to support leadership development?

Results Achieved

 Have our managers demonstrated the new required capabilities? (What have they
  learned and what have they applied?)

 Are we retaining our critical talent?

 Are we recruiting talent that brings distinctive capabilities to the organization not
  available internally?

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